SFO urged to reopen Murray probe

Former Labour MP Sue Moroney has called on the Serious Fraud Office to reopen its investigation into the spending of Dr Nigel Murray in light of an Auditor-General’s inquiry into the purchase of an online doctor app.

The ex-Waikato District Health Board chief executive, with former board chairman Bob Simcock, has been criticised over the flawed procurement of HealthTap in 2015, in a report released yesterday by the Auditor-General.

It comes as Simcock told the Herald he was relaxed about his role in the saga, which cost taxpayers $26 million.

Moroney said the AuditorGeneral’s report raised more questions than it answered.

The SmartHealth virtual care app was an abysmal failure and was eventually canned by a new board after the project failed to reach targets by the end of a two-year contract.

“The rules and procedures ignored by Waikato DHB in its expensive virtual health experiment are there to protect taxpayers,” Moroney said.

“Those procedures weren’t followed and we still don’t know why the decisions were made in haste without due diligence or other providers being considered.

“Given what we know about Nigel Murray’s history of unauthorised spending, the Serious Fraud Office needs to reopen its investigation.”

Driven by Murray and Simcock, who both later quit amid Murray’s expenses scandal, the procurement “fell well below the standards expected of a public entity”, the inquiry said.

Fundamental aspects of good procurement were missing, defective, or carried out too late in the process to be effective. These included:

● No formal planning before HealthTap was approached — which meant no business case and risk analysis, no identification of stakeholders and no evaluation of other options in the market.

● The DHB’s legal and procurement teams were not notified of the process and there was no evidence of governance oversight until after a contract was already drafted.

● No evidence that before approaching HealthTap any consideration was given to either specific government rules, including whether the DHB was permitted to approach a single provider, or the DHB’s own procurement policy.

Murray could not be reached for comment and his lawyer did not respond to questions.

Simcock said he was “comfortable” with his role in the procurement and denied that it was rushed.

He first visited HealthTap at its Palo Alto base in California in November 2014. Murray went in mid-March and by April they had a draft contract.

The board was presented with the virtual care strategy in mid-June and signed off in mid-July, although it’s understood two board members voted against it.

When asked about the sidestepping of national rules on procurement, Simcock said he was not in a position to provide an informed response, despite reading a draft copy of the inquiry report some months ago.

Health Minister David Clark said mistakes had been made and it was important lessons were learned.

“Clearly procurement processes were not followed as they should have been and there are lessons there for the wider industry.”

Waikato DHB commissioner Dr Karen Poutasi said the DHB now had a new approval process for capital spending of public money.

Auditor-General John Ryan said the inquiry findings justified initial concerns.